ALERT - DOL Publishes Final Rule Adopting New FMLA Regulations

On November 17, 2008, the Department of Labor (DOL) issued its Final Rule updating regulations regarding the Family and Medical Leave Act (FMLA). This marks the first change to FMLA regulations since previous regulations went into effect in April 1995. The revised regulations address the new military leave entitlements under the FMLA and implement a number of other changes to the way that FMLA leave is administered.

The new Final Rule will take effect January 16, 2009.

Significant changes under the new Final Rule are as follows:

New Military Leaves Under NDAA

The National Defense Authorization Act (NDAA) for Fiscal Year 2008 amended the FMLA to provide for two new types of leave related to military service: military caregiver leave and “qualifying exigency” leave.

Military Caregiver Leave

One new type of leave is military caregiver leave, which permits an eligible employee who is the spouse, son, daughter, parent, or next of kin of a “covered servicemember” to take up to 26 workweeks of leave during a 12-month period to care for the servicemember.

The new regulations define the term “covered servicemember” as including members of the Armed Forces, including the National Guard or Reserves, who are receiving treatment for a “serious illness or injury” incurred in the line of duty on active duty that “may render the member medically unfit to perform the duties of the member’s office, grade, rank, or rating.” The new regulations state that an employee may take military caregiver leave to care for a covered servicemember with a serious injury or illness for which the servicemember is: (1) undergoing medical treatment, recuperation, or therapy; or (2) otherwise in outpatient status; or (3) otherwise on the temporary disability retired list. However, military caregiver leave is not available for employees to care for former military servicemembers who are not on the temporary disability list or military servicemembers who are on the permanent disability retired list.

“Qualifying Exigency” Military Leave

Another new type of FMLA leave related to military service established by the NDAAis “qualifying exigency” military leave. Under qualifying exigency military leave, an eligible employee may take FMLA leave for any qualifying exigency arising out of the fact that a spouse, son, daughter, or parent is on active duty or has been notified of an impending call or order to active duty in support of a contingency operation.

While the NDAA left the term “qualifying exigency” undefined, the new regulations define “qualifying exigencies” as including:

short-notice deployment;

military events and related activities;

childcare and school activities;

financial and legal arrangements;

counseling;

rest and recuperation;

post-deployment activities; and

additional activities when the employer and employee agree to the leave.

These new regulations elaborate on the meanings of “qualifying exigencies” in greater depth, and also define the terms “active duty” and “contingency operation.”

Employee Eligibility for FMLA Leave

The new regulations clarify that an employee may become eligible for FMLA leave if he or she satisfies the 12-month employment requirement while out on non-FMLA leave provided by his or her employer. The new regulations also emphasize that an employer may not count any of the non-FMLA leave that the employee used prior to the employee’s satisfaction of the 12-month requirement against the employee’s 12-week FMLA entitlement.

Light Duty

Some courts interpreted previous regulations as permitting employers to count any time that an employee spent working on a “light duty” assignment against that employee’s entitlement to FMLA leave. The new regulations provide that time spent performing “light duty” work may not count against an employee’s entitlement to FMLA leave.

Removal of Categorical Penalties

The new regulations eliminate the categorical penalties from the previous regulations, which allowed employees who did not meet the 1,250 hours requirement or the 12 months of employment requirement to be eligible for FMLA leave if their employer failed to provide them with required eligibility notices or provided them with incorrect information. This change is in keeping with the U.S. Supreme Court’s decision in Ragsdale v. Wolverine World Wide, Inc., in which the Court held that the DOL did not have the authority to deem employees eligible for FMLA leave who did not meet the 1,250 hours or 12-month requirements set forth in the statute. 535 U.S. 81 (2002). On the other hand, the new regulations state that an employer may be liable to an employee for failure to follow the FMLA’s notification rules if the employee suffers individual harm as a result.

Settlement or Waiver of FMLA Claims or Rights

Some courts interpreted previous regulations as requiring court or DOL approval of any settlement or waiver of FMLA claims or rights by an employee. The new regulations make clear that an employer and employee may voluntarily settle their FMLA claims without court or DOL approval.

Bonus Payments

Previous regulations differentiated between bonuses paid by employers based on an “absence of an occurrence” (such as a perfect attendance bonus) and bonuses that required performance by an employee (such as a monthly production bonus). Under previous regulations, an employer was obligated to pay the former type of bonus to an employee who used FMLA leave, but was not obligated to pay the latter type of bonus to an employee who used FMLA leave unless the employer paid such bonuses to employees who used non-FMLA leave.

The new regulations dispense with the distinction between bonuses that require performance and bonuses based on an “absence of an occurrence.” Instead, the new regulations provide that any type of bonus or payment based on the achievement of a specified goal—such as hours worked, products sold, or perfect attendance—need not be paid to employees who use FMLA leave unless such bonuses are paid to employees who use non-FMLA leave.

Other Changes

Other changes implemented by the DOL’s new Final Rule include changes to: the definition of “serious health condition”; certification processes; and employer and employee notice requirements, among others.

Recommendations

Employers should update FMLA policies to reflect changes set forth by the Final Rule. If you have questions about the impact of these new FMLA regulations or would like assistance in updating your company’s FMLA policy, please contact your Briggs and Morgan attorney or a member of the Labor and Employment Group.